I'm a New York-based writer and entrepreneur. Previously, I worked as an editor at Maxim and Popular Mechanics magazines. In addition, I sometimes pop up on cable news and History, Discovery, and National Geographic, and am the cocreator of the iOS fashion app Cloth. As a writer, I'm interested in the tech of culture, and the culture of tech.
For more fun, you can follow me on Twitter: @sethporges, subscribe to me on Facebook , or Circle me on Google+.

Facebook Co-Founder Eduardo Saverin Is Making A Terrible Mistake

If somebody offered you $67 million to never touch a decent hamburger again, would you take the money?

To us mere mortals, there probably isn’t much we wouldn’t do to save sixty-something million in taxes. But I still can’t shake the feeling that Eduardo Saverin’s decision to renounce his American citizenship—and very likely his ability to ever cross customs into our fair land again—is incredibly short-sighted. All arguments aside about whether he’s saying sayonara to his citizenship for tax reasons or not (and his lawyers’ predictably claim he’s not), or whether what he’s doing is right or fair, it just seems like a bad idea from a simple math perspective.

Let’s say Saverin has got roughly $3 billion in Facebook stock. News reports indicate he’s saving just $67 million of that by saying goodbye to America on the eve of Facebook’s IPO. That’s just 2.2 percent of his total wealth.

Now if Saverin has any desire at all to fund new start-ups or work in the tech world in any capacity in the future, it seems like being able to step foot in San Francisco or Seattle would be worth more than 2.2 percent of his holdings. Saverin’s cash currently gives him an enormous amount of leverage to do business. By isolating himself from the United States—and much of the country’s business community—he’s effectively crippling his ability to take advantage of this leverage.

That’s not to mention the collateral damage his decision is likely to have to his own brand. One gets the feeling that the PR hit Saverin is currently experiencing will leave him, to some degree, as damaged goods. It’s not hard to see some American businesses as unwilling to work with Saverin in the future, due to the possibility of a PR backlash. Whether he likes it or not, Saverin is going to be a walking, talking stand-in for tax dodgers and tax shelters, and there’s a real possibility that it could become politically dangerous for companies to work with him in the future.

And then there’s another simple fact: For just 2.2 percent of his wealth, Saverin is giving up the ability to ever taste a decent hamburger again. Though I suppose with that kind of cash, he could just have a cow and chef flown directly into Singapore.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

What an incredibly close minded article. Anyone with the resources is expatriating to escape not only unfair taxes but a country that is increasingly becoming more of a police state. America is no longer the land of the free.

A Brazilian born man, who spent 10 years as an american citizen, who now is leaving to work on start ups in Singapore is renouncing his citizenship to get citizenship in the country he is now working in? Inconceivable!

morality aside, I disagree that is is a bad tax move, his move was probably more due to the fact that it is extremely difficult, and in some cases impossible, to open a bank account in other countries as an american citizen rather than just this 40 mil in tax savings. this is due to the fact that the US taxes large incomes made outside the US (on top of what ever foreign taxes you already pay), thus most banks will not open account for US citizens or a spouse of yours because it opens them up to so many additional liabilities.

I think he is like so many others in his income level, he seems to think that he is such a blessing to the rest of us, that some how he should be exempt, and get a free ride, forgetting that this is a collective society, and we are the reason he is rich, not him, but he wants a free ride. I hope he is deported, his property in the us is seized and he is never ever allowed into this country again.

Please before writing an article like this, read the other articles on Forbes. Learn about FATCA and how doing business, or even banking as an American citizen outside of the homeland is becoming increasingly difficult. If Saverin is planning on doing business in Asia, shedding the US citizenship rids him of the burden of reporting and paying taxes for the rest of his life.

Being a US citizen is not seen as a benefit by anyone outside the US and US business people and employees are seen as high risk because of the FBAR and FATCA reporting requirements.